Government Settles Two Medicare Suits

Aug 12, 2004 | AP

Two insurers have settled civil Medicare fraud charges with the U.S. Attorney's office in Manhattan for $20.6 million, the government said Thursday.

Prosecutors said The Travelers Insurance Co., a life insurance unit of New York-based Citigroup Inc., and United Healthcare Insurance Co., a unit of UnitedHealth Group Inc. in Minnetonka, Minn., agreed to settle the case without admitting or denying wrongdoing.

Under the terms of the settlement, Travelers will pay $10.9 million, while United Healthcare will pay $9.7 million.

"The Travelers Insurance Co. decided to settle in order to avoid the distraction of further litigation, and denies any wrongdoing in the case," Travelers spokesman Bob Nolan said. "Today's settlement announcement closes a chapter on an issue that dates back almost a decade."

A spokesman at UnitedHealth Group couldn't immediately be reached for comment.

The government had claimed that Travelers, between October 1988 and January 1995, inflated its cost reimbursements well above its actual expenditures under the Medicare program in order to obtain higher reimbursement and greater performance incentive payments.

Travelers served as the fiscal intermediary for Medicare programs in portions of Connecticut, Michigan and New York, the Medicare carrier for Connecticut, Minnesota, Mississippi and Virginia, the Railroad Retirement Board carrier nationwide and the Durable Medical Equipment carrier for Connecticut, Michigan and New York.

United Healthcare took over those contracts from Travelers in January 1995 and continued the improper billing practices through December 2000, prosecutors claimed.

The lawsuit was brought after a whistleblower came forward, the government said.

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